Shell PLC is scheduled to report its second-quarter results on Thursday. Here are the key details:
Adjusted Earnings Forecast
The energy major is expected to see adjusted earnings of $5.58 billion in the quarter, according to a market consensus compiled by Vara Research. This is significantly down from last year’s record earnings of $11.47 billion.
Cash Flow from Operations Forecast
Based on the same market consensus, Shell is projected to have cash flow from operations of $14.62 billion, compared with $18.655 billion in the previous year.
What to Watch
During its Capital Markets Day, Shell announced plans to launch $5 billion in buybacks in the second half of the year. The company aims for higher shareholder distributions of 30%-40% of cash flow from operations through the cycle. RBC Capital Markets analyst Biraj Borkhataria estimates that investor expectations for the third quarter are around $3 billion.
Working Capital Inflow
Shell recently stated that it expects a significant working capital release in the range of $2 billion-$6 billion for the second quarter. This news has increased investors’ confidence in the buyback plans. Furthermore, a large working capital inflow could help offset a weaker second quarter compared to the preceding one, according to Berenberg analysts. Bank of America analysts anticipate working capital inflows of $4 billion for Shell.